A Tax Upon The GOP

Obama LaughingObama may well be the best the shuck and jive master in the history of American Politics. America’s First Black President has successfully used the bully pulpit to further class warfare and to further fill the troughs for the eaters and takers on the strength of protecting the Middle Class while increasing their tax burden.

The boy, his female, and their brood are going to laughing all the way to Bill Ayers’ next dinner party / SPA fundraiser after pulling off this coup on the American people, as they should do. This was a manipulative masterstroke worthy of Black Folklore; Br’er Rabbit could not have done even one whit better.

Confused? Don’t be; it’s really simple once it’s explained. The deal, if one can call it that, that so conveniently ended the Democrats’ Fiscal Cliff scare included a lot of extensions on entitlements and subsidies to the eaters and takers but didn’t include an extension of the payroll tax cuts.

Since the majority of the Republicans are the ones who pay payroll taxes and the majority of Democrats are the ones who don’t, Obama and the Democrats have maintained the subsidized lifestyles of their constituency while raising taxes upon the GOP’s constituency by allowing the payroll tax rate to return to it’s old level.

Isn’t That Racist?

As the majority of people within America who pay payroll taxes are not just Republicans but also happen to White and the Majority of those who don’t are both Democrat and Black, this tax increase is, de facto, race-based and disproportionately impacts Whites. Isn’t that racist by longstanding Liberal logic?

Oh wait! Nevermind! Nothing that negatively impact Whites while not negatively impacting Blacks can ever be racist. I forgot that the Liberal criteria for racism is inherently racial in nature.

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OK, humor and sarcasm aside, it’s good that the payroll tax holiday was allowed to sunset. It never should have been granted in the first place given the insolvency of SSI. That doesn’t however change the fact the Obama and the Dems gulled the people into thinking that they were protecting them from tax increases while quietly increasing the taxes upon the Middle Class.

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Break Or Raise?

Obama - StalinObama had claimed that America was at a “make or break” moment for the middle class when it came to his plan to extend and increase the payroll tax breaks of last year. This is all well and good in the short-term, though it further beggars Social Security in the long run if the resultant revenue shortfall isn’t made up for.

Extending and deepening these “middle class tax cuts” wasn’t even a particularly contentious issue. The congressional Republicans quickly agreed that not extending these cuts was economically contraindicated at this exact time.

So the GOP-led House drafted a bill to extend the payroll tax breaks, additional limited unemployment benefits, and a continuation of full payments to doctors who treat Medicare patients – essentially everything that Obama had claimed he wanted and that the middle class needed.

Obama’s , his handlers’, and his sycophants’ response was to have a tantrum because funding for the measure did not come from taking further wealth away from higher income Americans. It was solely funded through a freeze on spending for federal salaries.

This debate should not be about scoring political points. This debate should be about cutting taxes for the middle class.

If the President were presented with H.R. 3630, he would veto the bill.

— Executive Office Of The President
Office Of Management And Budget
Statement Of Administration Policy

It seems that the extension of the payroll tax cuts for the middle class are only vital and necessary if they’re paid for by increasing the amount of money taken from wealthier Americans and that wealth redistribution is the avowed administrative policy of the Obama Regime.

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Obama To Gut SSI

Emperor Obama wearing laurel wreathAmerica’s Campaigner-in-Chief, Obama, thinks that gutting Social Security is a good thing but wants to push the GOP into being the ones that do it. Or, at least, that’s what he was jabbering in New Hampshire as part of his ever-rolling 2012 reelection campaign.

Specifically, he demanded that the payroll tax-cuts he got through Congress earlier this year be extended past their agreed upon duration.

Hell, the boy even demanded that they be increased even further – all at the cost of Social Security which gets its funding from those payroll taxes.

During a speech Tuesday at a Manchester high school, the president was to argue that a failure to extend the tax breaks would hurt middle-class families already struggling amid a shaky economy, effectively daring congressional Republicans to block a measure and thus increase taxes.

“If we don’t act, taxes will go up for every single American, starting next year. And I’m not about to let that happen,” Obama said Monday, previewing the message he was expected to deliver.

The expiring payroll tax cuts came at a total cost of approximately $120 billion and not only does Obama want to increase that drain on Social Security’s already bleeding coffers, he wants to further cut the payroll tax by another 1% for workers, at a total cost of $179 billion, and cut the employer share of the tax in half as well for most companies, which carries a $69 billion price tag.

Given the ages and other demographics of the TEA Party, I’m sure that gutting Social Security to buy votes was an easy choice for Obama to make. It might even be punitive action.

The estimated to loss to Social Security from Obama’s transparent attempt to buy votes in 2012 would be $368 billion. This is a loss that it is doubtful that SSI can absorb.

Social Security expenditures exceeded the programs non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

There’s little or no doubt that Social Security is doomed. It was never designed to deal with America’s growing population and it’s trust fund was stolen by the federal government for their own uses decades ago. That doesn’t in any way make it right for Obama to try to gut it and to maneuver others into taking the blame for doing so.

If the boy wants to finally write off Social Security as a loss, fine. Let him own up to that and take responsibility for this one single thing during his misbegotten life and tenure as POTUS.

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It’s A Ponzi Scheme!

Certain sorts of people are quite angry that GOP hopeful, Gov. Rick Perry called Social Security (SSI) a Ponzi scheme. Yet, despite their claims, SSI bears a great resemblance to a Ponzi scheme.

Madoff on SSI
It’s Not Illegal When The Government Does It?

Most, though not all, of the arguments against Gov. Perry’s characterization of Social Security as a Ponzi scheme have their only objective basis in legalism and semantics, not factual analysis of the systems in question or their respective function.

The Securities & Exchange Commission (SEC) defines a Ponzi scheme as:

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Fraud?

Fraud is by definition wrongful or criminal deception. Since the creation of SSI and all the changes to it since its inception were done through the law’s fiat, it can’t be fraudulent from a legalistic standpoint. There’s been a great deal of deception and disinformation about SSI’s solvency, independence from the government’s general fund, and trust fund operations over the years though.

As a matter of legality and semantics SSI doesn’t meet the fraud requirement of being a Ponzi scheme. From an ethical standpoint however, the matter is in some doubt.

Promise Of High Returns

This is one point where SSI absolutely fails to meet the standards for being a Ponzi scheme. Social security doesn’t claim to generate high returns for it’s “investors” because the government doesn’t need to lure in new investors. Participation is mandatory and the rate of “investment” is completely controlled through force of law. The government has absolutely no need to lure anyone in.

Payment Structure

While SSI has “investments” they’re of limited return and 100% of them are in IOUs from the federal government, meaning that each new generation of forced investor is paying for the returns for the previous generation and all the taxpayers are making up the difference as needed.

Given that returns to existing investors are from funds contributed by new investors and there’s a certain lack of honesty in how SSI’s trust fund interaction with the federal government’s general fund is portrayed, there’s little functional difference on this point between SSI and a Ponzi scheme.

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What it boils down to is that SSI is what the average private sector fraudster wishes that they could turn a Ponzi scheme into. The real differences between the two things are all a result of the government being the promoter of the scheme in case of Social Security.

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